Microsoft Could Pull Windows out of South Korea

Responding to a statement from South Korea’s Fair Trade Commission, Microsoft has stated that if they are required to remove code, such as MSN Messenger or Windows Media Player, and create a special edition for the Korean market, that they may have to withdraw Windows or delay the offering of new versions of Windows. From,

The KFTC began its probe in 2001, when South Korean Internet portal Daum Communications alleged that Microsoft’s bundling of the operating system with other services broke antitrust rules. It widened the probe, following a similar complaint from RealNetworks in late 2003.

A ruling could come as soon as Wednesday, a KFTC spokesman said.

“No matter what Microsoft does, we will proceed with our deliberation and discuss it again at a plenary session on Wednesday,” Lee Tae Hwi said by telephone. “There is no change in our stance to fight unfair business practices.”

In a recent settlement with Realnetworks, Microsoft agreed to pay them 761 million to settle a suit that claimed Microsoft was using it’s dominance to push Windows Media Player.

As a part of the agreement, RealNetworks said it would drop similar suits in South Korea and Europe.

But the Korean commission has said its investigation would not be affected by the settlement.

An article on Yahoo from the AP, adds,

Microsoft’s competitive practices have been under investigation by the Korean Fair Trade Commission, which is looking into the company’s inclusion into Windows of streaming media and instant messenger technology.

The Redmond, Wash.-based software giant has faced legal and regulatory antitrust actions worldwide because of its decisions to include various services in its operating system.

In its quarterly report filed Thursday with the Securities and Exchange Commission, Microsoft said the Korean commission could require the company to remove code or redesign Windows uniquely for the Korean market.

In other news, Microsoft reported their first quarter earnings, which were just ahead of Wall Street estimates, but, even so, sales and current quarter forecasts fell short of their expectations.

The company said it earned $3.14 billion or 29 cents per share, on revenue of $9.74 billion for the three months ended Sept. 30, including the earnings hit caused by a settlement with RealNetworks. The results compare with earnings of $2.52 billion, or 23 cents per share, on revenue of $9.19 billion for the same quarter a year ago. The year-ago figures include a charge for Microsoft’s settlement with Novell.

Excluding the cost of the RealNetworks pact, Microsoft would have had earnings of 31 cents per share. Analysts were expecting the company to post earnings of 30 cents per share, excluding the legal costs, but including stock-based compensation charges, on revenue of $9.78 billion, according to First Call. In July, Microsoft had forecast earnings of between 29 and 31 cents per share on revenue of $9.7 billion to $9.8 billion.

There’s always bad news with the good news, right folks?

Shares of Microsoft slipped in after-hours trading following the report, changing hands recently at $24.16, down more than 2 percent from their $24.85 closing price.

For the full fiscal year, which stretches through June 30, Microsoft said it expects revenue in the range of $43.7 billion to $44.5 billion and per-share earnings in the range of $1.26 to $1.30, including the two-cent charge for the RealNetworks settlement. That’s roughly similar to the full-year outlook given by Microsoft three months ago.

They have announced a “big bang” of products coming, pointing to the release of SQL Server 2005, Windows Vista, Visual Studio and other products.

Microsoft is “at the beginning of 12 months of the greatest innovation pipeline we have ever had,” Ballmer said.